Dexus’s latest revaluations reveal that any softening of rents and incentives have been offset by a slight compression in cap rates driven by a long term view of lower interest rates.
Dexus have revalued 111 of its 122 assets, comprising 42 office properties and 69 industrial properties as at 31 December 2020.
The external independent valuations have resulted in a total estimated increase of circa $109 million or 0.7% on prior book values for the six months to 31 December 2020.
Darren Steinberg, CEO of Dexus said: “We have seen continued interest and demand from investors despite softer fundamentals in the office occupier market. These investors are looking through the current cycle, recognising the long-term value and benefits of being able to increase their investments in Australian real estate.
This dynamic, coupled with lower for longer interest rates has supported cap rates and asset values.
“Our latest independent valuations demonstrate the resilience of high-quality assets in prime locations. The office portfolio value was in line with prior book values as a result of the softer valuer assumptions over the next 12 months relating to rental growth, downtime and incentives, being offset by successful leasing. The industrial portfolio experienced a circa 4.5% increase on prior book values, reflecting recent portfolio leasing and the
continued investment demand for industrial assets globally”.
The weighted average capitalisation rate across the total portfolio tightened circa 4 basis points over the past six months from 5.05% at 30 June 2020 to circa 5.01% at 31 December 2020. The weighted average capitalisation
rate of the office portfolio tightened circa 2 basis points from 4.97% at 30 June 2020 to circa 4.95% at 31 December 2020 and the industrial portfolio weighted average capitalisation rate tightened circa 30 basis points
from 5.66% at 30 June 2020 to circa 5.36% at 31 December 2020.
Details relating to specific individual property valuations will be available in Dexus’s 2021 half year results which will be released on Tuesday, 9 February 2021.
Related Articles
